SEPS Blog "COVID-19"

Our blog showcases our broad and diverse research done at our school in a comprehensive and accessable way. The blog posts combine our expertise and competence in the fields of political science and economics, stimulates the public discussion and influances decision makers.

Much of what has been written about the $597 billion trade worldwide in medical products and medicines linked to the COVID-19 pandemic has emphasised either the prevalence or consequences of export curbs or made the case for liberalising imports, principally through eliminating tariffs. Few have linked these two policy instruments and, those proposals which have, did not draw out the logic of the basis for a deal between governments. Failure to do so obscures one of the main benefits of much needed collective action.

We study how the share of employment that can work from home changes with country income levels. We document that in urban areas, this share is only about 20% in poor countries, compared to close to 40% in rich ones. This result is driven by the self-employed workers: in poor countries their share of employment is large and their occupational composition not conducive to work from home. At the level of the entire country, the share of employment that can work from home in poor countries compared to rich countries depends on farmers’ ability to work from home. This finding is due to the high agricultural employment share in poor countries.

Within just three months after the arrival of the virus, as of the middle of March 2020, the fight against the Covid19 pandemic has left the international political and economic cooperation in a wreckage. Even Europe’s densely knit supranational institutions have been paralyzed by the tsunami of national go-it-alone approaches. Yet there are two commonalities across almost all of Europe: A lockdown on citizens’ freedom and open protectionism at the national borders. This is the assumed starting point for a qualitative simulation by Prof. Ernst Mohr of the challenges posed by a hypothetical mutant of Covid19, which in the following is called Modi-Covid19.

Faced with surging rates of infection among their populations, governments are desperate to acquire medical supplies and equipment for their nation’s hospitals and medical professionals. Currently, governments are acting unilaterally, often taking steps that are ineffective, that offer very short-term gains or that harm citizens in other countries.